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🇳🇵 Nepal /Energy & Infrastructure

Nepal's 30,000 MW Power Goal Imperiled by PPA Standoff

From Kathmandu Post · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Nepal's government aims to generate 30,000 megawatts of electricity within a decade, but faces significant hurdles.
  • Key stakeholders, including the Independent Power Producers’ Association Nepal (IPPAN), argue that opening Power Purchase Agreements (PPAs) is crucial for achieving this goal.
  • Past targets have been missed due to weak implementation and a lack of private sector inclusion in planning, raising concerns about the feasibility of the current ambitious plan.

The government's ambitious 30,000 MW electricity generation target, while laudable on paper, faces a serious roadblock: the stalled Power Purchase Agreements (PPAs). Independent Power Producers’ Association Nepal (IPPAN) president Ganesh Karki rightly points out that the private sector is ready to contribute significantly, but requires clear government action. The current system, forcing developers to navigate 23 different government bodies, is an archaic barrier that a one-window system could easily fix. Without opening PPAs, the target remains a distant dream.

The government must also focus on implementation to meet its target. For that, the modality of the 30,000 MW plan must be clearly defined.

— Ganesh KarkiPresident of the Independent Power Producers’ Association Nepal (IPPAN), emphasizing the need for clear implementation strategies.

Former secretary Madhu Prasad Bhetuwal echoes this sentiment, emphasizing that PPAs are not just desirable but essential for project development. The plan to export 15,000 MW to India and Bangladesh, alongside domestic consumption, hinges on securing these agreements. While projects like Arun-3 and Lower Arun are progressing, the Nepal Electricity Authority (NEA) and the ministry must clarify the procurement modality, especially considering market risks. The current take-and-pay model for run-of-river projects, as stated in the budget, has effectively halted new PPAs, a move that has drawn objections from private developers and even ruling party lawmakers.

The government cannot achieve its target without PPAs, nor can projects be built without them.

— Madhu Prasad BhetuwalFormer secretary, highlighting the critical role of PPAs in project development.

This isn't the first time such targets have been set. Previous governments have announced similar goals, only to see them falter due to weak implementation. IPPAN deputy general secretary Prakash Chandra Dulal criticizes the cycle of announcements without review, noting that despite the current government's strong majority, private sector consultation on the 30,000 MW plan has been lacking. While international energy trade agreements signal a potential PPA opening, clarity is needed. The NEA's cautious wait-and-see approach, stemming from the budget's PPA provision, highlights the uncertainty plaguing the sector. For Nepal to truly harness its hydropower potential, a clear, consistent, and supportive policy framework, particularly regarding PPAs, is urgently required.

What happened to implementation is never reviewed. Only announcements are made.

— Prakash Chandra DulalIPPAN deputy general secretary, criticizing the lack of follow-through on previous government targets.
DistantNews Editorial

Originally published by Kathmandu Post in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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